Business as usual post-COVID-19? Not a chance…. Many businesses will resume and many may never recover. Companies will be focused on revenue generation, resuming some business operations, and restructuring workforce and office environments. One area where companies will need to turn their focus is their employee benefits programs. What changes will be needed as we enter the new normal?
Just two months ago, companies had to compete for talent by offering robust packages and supporting programs to attract talent and retain staff. Now that a large number of Americans are unemployed, companies will have their pick of talent, a phenomenon we have not seen for businesses in years. With this in mind, it is more important to have a solid benefit strategy to offer your new prospects.
Here are five areas that companies should focus on as they consider a new approach to their benefits strategies:
Ensure you are COBRA compliant
Every employee who has lost coverage is entitled to COBRA continuation rights. The question of “who” makes the offer is a function of your group size and state. If your firm has 20 or more employees, it is your responsibility to comply, as penalties for non-compliance are steep. Keep in mind it is not just a termination issue! Work with your broker to make sure you are completing all the necessary parts of the COBRA compliance.
Review current offerings and contribution formulas
As previously mentioned, companies were ferociously competing for talent pre-COVID. Benchmarking benefits were critical and expanding offerings was essential. Looking forward, you need to review what you offer, why you offer it, how you offer it, and what the market demands for retention and attraction. Companies will scale coverages back, look to change contributions for employees, and seek ways to manage their benefits budgets. What’s right for your company may be different from others – given geography and demographics. Note that COVID hasn’t helped the pricing of benefit plans. Expect to see increased costs for healthcare in the years ahead.
Explore voluntary benefits
These are the hidden gems of benefits – plans that can be purchased by employees, and many times pre-taxed. It’s not only Aflac, but a host of offerings from life insurance, sickness, critical illnesses, and even pet insurance. These plans can add up and the premiums can have a collective reduction in payroll costs for workers’ compensation and payroll taxes.
Expand pre-tax offerings for premiums and healthcare expenses
This includes health reimbursement accounts, dependent care expense accounts, and review of health savings accounts. Each of these can help employees use pre-tax dollars to pay for items they are likely to pay for and saves taxes for all. (FYI – for post-COVID, the FSA has been expanded to allow for over-the-counter health care expenses).
Deploy an HR system that integrates payroll, time, attendance, and benefits
Companies have quickly figured out that having a system that can integrate payroll, time, attendance, communication, GPS tracking, and benefits enrollment is an essential tool for companies – big and small. With that in mind, a fully-integrated Human Resource Information System (HRIS) is a powerful tool to be equipped with. Without one, companies won’t thrive.
Want an experienced professional to help you map out your benefit package strategy? Get in touch with CorpStrat today.